Ik heb besloten om de sprong over de Atlantische Oceaan te wagen en mijn succes in de VS te beproeven. Jawel, ik kan net zo overdrijven als de gemiddelde marketeer in die Nieuwe Wereld. Want wat is het geval? Er wandelt een of andere Amerikaan rond die zich op Twitter @jobboarddoctor noemt. En die met enige regelmaat kabbelende artikeltjes schrijft voor online recruitment newbies. Recent schreef hij ook kwijlerig stukje over BranchOut, het LinkedIn kloontje op Facebook wat alle kenmerken van een piramidespel in zich herbergt. Dat vervolgens door Shally Steckerl wordt geretweet. Waar ik dan weer als volgt op reageer:
Afijn, lang verhaal kort, ik heb op verzoek van Shally een artikel over BranchOut in het Engels geschreven. Dat hieronder in zijn volledigheid is weergegeven. In het Engels dus. Terwijl dit dus een Nederlandstalig weblog is. Waarvoor mijn excuses… Maar ja, ik ben ook zo trots dat ik eindelijk iets in de VS heb kunnen publiceren dat ik het eenvoudigweg niet kon laten. Dus…
Is BranchOut a Ponzi scheme?
There are a whole lot of LinkedIn wannabe’s on Facebook, but there is one that stands out from the crowd: BranchOut. It is the oldest one (launched in July 2010), the one with the biggest funding ($49 million) and with a CEO that is getting a lot of attention lately. But when it comes to the real numbers, things become a little murky.
My interest in BranchOut peaked when they announced a partnership with StepStone (Netherlands), beginning of March 2012. At that time BranchOut claimed to have 1.5 million Dutch profiles:
Considering that the Netherlands is LinkedIn’s most successful country in the world with over 3 million profiles, the number BranchOut claimed seemed incredibly rich to me. And as it turned out, it was. This is what a spokesperson for BranchOut replied when the number of 1.5 million profiles was called into question:
BranchOut has over 10 million registered users but due to the network effect of Facebook, BranchOut has over 300 million searchable professional profiles of our users extended Facebook friend network.
Let’s be friendly here and say that BranchOut has been rather creative with the truth when it trotted out the number of 1.5 million Dutch profiles. And unlike other social/professional networks, BranchOut apparently refers to profiles as the maximum number of people one can reach, not the number of people that have actually signed up for BranchOut itself.
When trying to determine the actual number of real Dutch BranchOut profiles based on the above-mentioned distinction, I come up with approximately 50,000. That sounds like a more reasonable number, considering that BranchOut is completely unknown over here.
This in essence seems to be what BranchOut is all about. It’s a numbers game. To be fair, BranchOut growth has been staggering in the past few months. They even made it to the leaderboard of Facebook apps for a short time as one of the fastest growing apps in terms of daily average users. While impressive at first blush, the reasons for this growth are way more important than the growth itself.
Because what is causing BranchOut to grow at such a breathtaking pace? According to the company, its recently launched mobile app is the ‘culprit’. But there is a probably more important reason, spamming your Facebook ‘friends’ with BranchOut invites when you sign up. Because BranchOut makes it real easy to send a BranchOut invite to a (Facebook imposed) maximum of 50 connections. And to resend those invites without you knowing it.
This type of ‘viral’ tactic can result in a huge growth as long as new ‘victims’ can be inundated with invites. A true Ponzi scheme. But when the whole of the Facebook ecosystem has been invited to BranchOut a couple of times over, the music inevitably stops. Which seems to be the situation where BranchOut finds itself at this very moment. Because since little more than a week the monthly average users (MAU) number is dropping fast. It seems that BranchOut has peaked.
However, the media blitz of Marini, coupled with the double whammy of 25 million subscribers and a $25M Series C investment has made BranchOut a media darling. Where even people that should be banned from opening their mouths forever regarding investment advice (read: Henry Blodget) praise the glory of BranchOut. For a bit of jaw-dropping nonsense, read his article titled Hey, LinkedIn, You’d Better Go Buy BranchOut — Before Facebook Does. Too lazy? Then just read this piece of incredible hyperbole:
A professional social network app that floats on top of Facebook, BranchOut, just raised another $25 million.
BranchOut was started two years ago and already has 25 million users, which puts it on a similar growth ramp to Instagram–the photo-sharing app that Facebook bought last week for $1 billion.
In other words, Blodget suggests BranchOut to be worth $1 billion based on the single fact that is shows a growth similar to Instagram. And that Facebook (or LinkedIn) should buy BranchOut for such a ludicrous amount of money. Which makes you wonder why this former Wall Street sell-side analyst (with a very, very checkered history) is pimping BranchOut…
If (or rather when?) Facebook decides to enter the online recruitment arena, LinkedIn will likely have a problem. But if I was Jeff Weiner I would go down on my knees and pray that Facebook buys BranchOut for $1 billion. Because it would mean Facebook wastes a shitload of money on what is likely to turn out to be a complete dud. And it will buy LinkedIn more time to grow her B2B business.
A complete dud? Strong words indeed. But to reinforce that qualification, let’s turn to the numbers. I’ll start with the amount of social media buzz for both Instagram and BranchOut for the whole of 2012 in the Netherlands. Seems appropriate, considering the Blodget’s comparison:
Number of social media references with the word “branchout” (blue line) and “instagram” (red line), January, 1st – May, 9th 2012. Source: Coosto
Hang on… where is BranchOut? Well, it’s that blue line that is bottom-bouncing and seems to be completely flatlining from the end of March onwards. To be completely clear, the tiny blips over the course of April and May are nearly exclusively references to blog postings I wrote on BranchOut. So none of the approximately 50, 000 BranchOut users in the Netherlands is talking about this service on any social media? That sounds rather worrisome… Certainly compared to the rather active and apparently growing chatter about Instagram. Does this mean that Instagram is actually used and discussed while BranchOut is not used at all (and therefore not discussed)…?
Now, let’s look at the number of people that have signed up for BranchOut in the Netherlands and allowed the application to tweet this event. Remember, the Netherlands has one of the highest user density of Twitter users in the world.
Number of social media references with the phrase “started using branchout”, January, 1st – May, 9th 2012. Source: Coosto
The red bar is the launch date of the collaboration between StepStone Netherlands and BranchOut.
So there is a short blip in the number of BranchOut registrations in the Netherlands that has reversed back to zero by the end of March – beginning of April. The total number of registrations in March 2012 is 798 based on this selection. So now the approximate number of BranchOut users in the Netherlands is 50,798. Impressive growth indeed…
But not only did the ‘growth’ of BranchOut stalled in the Netherlands, it seems that their Ponzi scheme has reached its worldwide apex just a week ago. And just like a Ponzi the downhill part of the boom-bust cycle is generally the fastest. It is therefore no wonder that BranchOut now shows up on a totally different leaderboard of Facebook apps, this time for apps that show the biggest decline:
While losing 800,000 MAU in just one week is impressive enough, BranchOut has lost 1,5 million MAU from 13,9 million on April 29th down to 12,4 million on May 8th. That’s a huge loss in a very short period of time, considering it took the application nearly two years to grow to this level.
This means that Marini will need to turn up the volume to drown out the ever stronger sucking sound of diminishing MAU numbers. It seems that BranchOut and Marini have had their 15 minutes of fame, sliding back into well-deserved anonymity while burning through nearly $50 million faster than your average insolvent bank. In that respect, BranchOut reminds me of Jobster, and Marini is the second coming of Jason Goldberg. And just like Goldberg it seems that Marini is too late to flip the company while it was hot. Probably the numbers game ran out of steam earlier than expected. Soon BranchOut is once again nothing more than just another LinkedIn wannabe.